Wednesday, January 05, 2011

Rabid Partisanship

At the first meeting in Sacramento, budget experts sketched out how the state’s unprecedented economic downturn was exacerbated by elected officials’ inopportune decisions. These decisions include outgoing Gov. Arnold Schwarzenegger’s first action in office, the slashing of the vehicle license fee, something experts had warned would cost the state billions over a few short years.

Did you get that? The reason California's in such deep crap is primarily because of the reduction in the vehicle license fee. Had Schwarzenegger not lowered that fee, everything would be hunky-dory. What other conclusion could one reasonably draw from this paragraph, quoted from the mouthpiece rag of the California Teachers Association?

My favorite part of it was the complaint of the estate tax. I have a real problem with taxing estates. This is money that was fully taxed when earned. Why does the State feel it has the right to tax it a second time?

You can't *logically* draw the conclusion that "if the [gov] hadn't lowered the fee everything would be hunky dory." You draw the *logical* conclusion that lowering revenue contributes to increased deficits and debt. Certainly, increased spending does as well. However, at both the state and national level, half of the problem is increased spending and the other half is plummeting revenue.

That's the conclusion you should draw - and while I know you oppose a lot of government spending, you are generally more reasonable about the significant impact of cutting revenue as well.

Saying "the actual problem is out-of-control spending" is a generalization that gets us nowhere. If you want to talk debt and deficit, it's not "out of control spending," it is about spending and revenue that don't match. It's basically issues of "pay-go." And you know, in CA, it's easy to pass spending and hard to pass revenue. So, *that* discrepancy is your problem.

And, Steve, your argument makes no sense. All money is taxed whenever it changes hands - that's the point. If I earn a paycheck and pay taxes on it, that money shouldn't be exempt from taxes when I spend it at the grocery store just because "it was fully taxed when earned." It changed hands and became "income" for a new person. Thus, it is taxed again. Just because there's a family relation doesn't mean it doesn't change hands. If my son owns the grocery store, should he not pay taxes when I buy a gallon of milk? Granted, that's a silly example - but it responds to your silly statement.

I would concede you're right in a "separate tax" as an estate. It should simply be taxed as "income." When my parents die and the property comes to me, it becomes "income" to me. And "income" is taxed in this country. So, separating it as an "estate tax" might be odd, but there is no logic in saying it was taxed when it was earned. It was earned by *a different person.*